The Enforcement Directorate has arrested travel firm Cox and Kings' promoter Peter Kerkar in an alleged money laundering case, as per reports. ED claimed that it has found the details of outstanding loans and how financial records and audit reports were fudged to take loans from Yes Bank. A formal complaint against Cox & Kings was filed by Yes Bank in March.
In June, the Enforcement Directorate carried out searches at premises of promoters and directors of Cox and Kings. It has been alleged by the ED that the promoters, directors, the Chief Financial Officer of the company had fraudulently obtained loans from Yes Bank worth Rs 3,642 crore.
In October, the ED had arrested Cox & Kings Group CFO Anil Khandelwal and internal auditor of Naresh Jain, under sections of the Prevention of Money Laundering Act (PMLA), in connection with the Yes Bank case.
An ED official said, "During investigation in the money laundering case, it has surfaced that Yes Bank has total outstanding of Rs 3,642 crore in respect of Cox & Kings Group of Companies (CKG)."
"Further investigation revealed that CKG forged its consolidated financials by manipulating the balance sheets of overseas subsidiaries. In addition, some board resolutions submitted to banks for sanctioning the loans were also found to be forged," he said.
The ED official also said that during investigation, it was also revealed that the loan sanction from Yes Bank was driven by then CMD Rana Kapoor and was given bypassing the norms.
The ED gathered the evidences regarding clear instruction of Kapoor to the concerned bank officials to get the said loan continued and not to make efforts to recover it, the official said.
"Investigation also revealed that during financial years 2015 to 2019, sales of Rs 3,908 crore were made to 15 non-existent/fictitious customers," he said, adding that majority of collections shown in ledgers from Ezeego (another group entity of CKG) was not found in the bank statements.
The official also said that there are 15 fictitious high-value debtors reflected in the books of accounts.
"Another 147 sets of customers also appeared to be suspicious and non-existent. Cox & Kings Ltd (CKL) has diverted Rs 1,100 crore to another stressed company without any approval of the board which has no business relationship with the company," he said.
"During the whole process, Khandelwal and Jain acquired the mortgaged property amounting to Rs 63 crore in their owned business entity — Reward Business Solutions, without paying a penny from their pocket."
Investigation further revealed that Khandelwal and Jain purchased various immovable properties from the funds diverted from CKG.
"Further investigation revealed that from Ezeego, Rs 150 crore were diverted to Redkite Capital Private Ltd which was promoted by family members of Khandelwal, CFO of CKL, and Jain, internal auditor of CKL," the official said.
(With inputs from IANS)